EUR/HUF: Forint carry to face NBH test – ING

💡 DMK Insight

Hungary’s potential rate cut could shake up regional markets, and here’s why you should care: If the National Bank of Hungary cuts rates by 25 basis points to 6.25%, it could signal a shift in monetary policy that impacts not just Hungary but the entire Central and Eastern European (CEE) region. Traders should watch how this move affects the forint and related assets, especially if it leads to a broader easing trend among neighboring countries. A rate cut typically weakens a currency, so expect volatility in the forint, which could create trading opportunities for those positioned correctly. But don’t overlook the flip side—if the cut fails to stimulate growth or if inflation remains stubbornly high, we could see a backlash against this dovish stance. Keep an eye on Hungary’s inflation data and economic indicators in the coming weeks, as they will be crucial in determining the sustainability of this rate cut. Watch for the forint’s response around key support and resistance levels to gauge market sentiment and potential entry points for trades.